FG Targets 2027 to End Power Subsidies

​The Federal Government has announced a decisive roadmap to completely phase out subsidy payments in the country’s power sector beginning next year, 2027.

​The Minister of Power, Joseph Tegbe, made the disclosure during a media interactive session in Abuja on Friday, emphasizing that the deliberate policy shift is designed to curb ballooning industry debts and establish a self-sustaining financial framework.

​For years, Nigeria’s power sector has battled severe liquidity strains driven by structural shortfalls. A wide disparity has consistently existed between the actual costs required to generate and transmit electricity and the actual collections made by distribution companies (DisCos) from consumers. Successive administrations have bridged this gap through multi-billion-naira government interventions, which have added heavily to national fiscal pressures.

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​Gradual Rollout and Consumer Protections

​Addressing concerns over the potential impact on households and businesses, Tegbe assured that the removal process will be implemented gradually. He firmly stated that the administration of President Bola Tinubu remains committed to protecting consumers from sudden shocks and ensuring that Nigerians are not deprived of essential energy services.

​“We have the mandate of Mr President to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more,” Tegbe stated during the parley. “I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. Mr President, we will not deprive Nigerians of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”

​Furthermore, the Minister ruled out any immediate plans to hike electricity tariffs, easing anxieties among citizens who rely on stable pricing amid broader economic reforms.

​Tackling Legacy Debts

​The move aligns closely with longstanding structural reform recommendations from international financial institutions, such as the International Monetary Fund (IMF), which have consistently advised Nigeria to phase out untargeted energy subsidies.

​The cumulative financial burden of the power sector has historically run into trillions of Naira, with generation companies (GenCos) frequently lamenting massive unpaid invoices. To clean up the balance sheet, the Federal Government has actively deployed interventions, including recent multi-trillion-naira bond programs aimed at clearing verified legacy obligations and restoring total investor confidence across the power value chain.